Number of first-time buyers reaches seven-year high

Written by : News | Tue 24th Feb 2015

The number of first-time buyers getting onto the property market has risen by more than a fifth over the previous year to reach a seven-year high.

The Halifax First Time Buyer Review said for the first time the number of buyers entering the UK property market increased by 22 per cent to 326,500 in 2014, which comes on top of a 23 per cent growth over the previous year.

The average cost of a first-time buyer purchase rose by nine per cent to £171,870, compared to a year ago. However, the average cost of a deposit for this buyer type fell by seven per cent over the same period to £29,218.

House prices showed growth during the first six months of the year, driven by initiatives such as the Government's Help to Buy scheme. In the second half of the year however fears of a housing bubble saw the Bank of England impose stricter lending limits on borrowers in a bid to slow the market down.

"Improving economic conditions and rising employment levels have boosted confidence, contributing to the significant increase in the number of first-time buyers in the past two years."

The report stated that Chancellor George Osborne's amendments to stamp duty reduced the average first time buyer's tax bill by £781.

The average deposit size has fallen to 17 per cent of the purchase price in 2014, from 20 per cent in 2013. This is still much higher than 10 per cent in 2007, the start of the financial crisis, when the average deposit was £17,499.